Wakilii

Airconditioning Centre (U) Ltd v Gilifilian air conditioning (U) Ltd (Civil Suit No. 638 of 2014)

High Court · [2015] UGCOMMC 115 · 2015 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract and recovery of payment for goods supplied
Decision
Judgment entered for the plaintiff with special damages, general damages, interest on both, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The court held that a binding contract existed where the defendant issued local purchase orders specifying goods, quantities, rates, and prices, and the plaintiff supplied the goods as ordered. The defendant's failure to pay for the delivered goods constituted a material breach of contract. The plaintiff was entitled to recover the contract price as special damages, general damages for business loss and inconvenience, and interest on both sums.

Outcome

Judgment entered for the plaintiff with special damages, general damages, interest on both, and costs

Facts

Between November 2013 and January 2015, the defendant issued multiple local purchase orders to the plaintiff for air conditioning materials, specifying items, quantities, rates, and prices. The plaintiff supplied the goods in accordance with the LPOs and the defendant acknowledged receipt by signing delivery notes. The total value of goods supplied was UGX 68,032,420. The plaintiff issued a demand note on 31 March 2014 requiring payment within five days. Despite this demand, a reminder on 26 June 2014, and a lawyer's demand notice on 4 August 2014, the defendant failed to make payment. The defendant contended it had agreed to pay only when it received payment from tenants at Acacia Mall and had not yet received those funds. The defendant and its counsel abandoned the proceedings, which then proceeded ex parte.

Issues

  1. Whether there was a contract between the plaintiff and the defendant.
  2. Whether the contract was breached by the defendant.
  3. What remedies are available to the parties.

Orders

  • Special damages of UGX 68,032,420 awarded to the plaintiff.
  • Interest on special damages at the rate of 21% per annum from 31 March 2014 until payment in full.
  • General damages of UGX 10,000,000 awarded to the plaintiff.
  • Interest on general damages at the rate of 6% per annum from the date of judgment until payment in full.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Contract Law — Formation — Offer and Acceptance — Local Purchase Orders
A binding contract is formed when a purchaser issues local purchase orders specifying goods, quantities, rates, and prices, and the supplier accepts the offer by delivering the goods in accordance with the LPO terms.
Contract Law — Breach — Material Breach — Non-Payment of Contract Price
Failure or refusal to pay the contract price for goods supplied and received constitutes a material breach of contract, being a breach that has a serious effect on the benefit the innocent party would otherwise have derived from the contract.
Damages & Quantum — Special Damages — Recovery of Contract Price — Sale of Goods
Under section 53 of the Sale of Goods Act, a seller can recover the contract price as special damages where consideration for it has failed, provided the claim is specifically pleaded and proved with particulars communicated to the defendant.
Damages & Quantum — General Damages — Assessment — Business Loss and Inconvenience
Under section 61(1) of the Contracts Act, a party who suffers a breach of contract is entitled to general damages for loss or damage caused by the breach, including compensation for business losses and economic inconvenience resulting from non-payment of the contract price.
Damages & Quantum — Interest on Special Damages — Commercial Transactions — Rate
In commercial transactions, interest on special damages is awarded at a higher rate than on compensatory general damages. A rate approximating the prevailing commercial banks' prime lending rate is appropriate, where the court exercises discretion under section 26(2) of the Civil Procedure Act in the absence of a contractually agreed interest rate.
Damages & Quantum — Interest — Accrual Date — Date of Invoice or Demand
Interest on the principal sum begins to accrue from the date the invoice is received, which becomes the due date. Where no invoice is issued, the date of the demand note serves as the date from which interest accrues.

Legislation cited (5)

Cases cited (12)

  • QB Kitura Macmot t/a Ongeya Supplies Ltd v Catholic Relief Services (CRS) Uganda (High Court Civil Suit No. 121 of 2001)
  • Uganda Telcom Ltd v Tanzanite Corporation (Supreme Court Civil Appeal No. 17 of 2004)
  • Wild Cheetah Tour and Travel v Amos Samiha Nsubuga (High Court Civil Suit No. 603 of 2003)
  • Nakawa Trading Co. Ltd v Coffee Marketing Board (High Court Civil Suit No. 137 of 1991)
  • National Power PLC vs. Limited Gas Co. Ltd and Another [1998] AU ER (D) 231
  • Uganda Revenue Authority v Wanume David Kitamirike (Court of Appeal Civil Appeal No. 43 of 2010)
  • Kamugira v National Housing & Construction Corporation (High Court Civil Suit No. 127 of 2008)
  • Oijo v Attorney General (High Court Civil Suit No. 02 of 1994)
  • Hajji Asuman Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)
  • Star Supermarket (U) Ltd v Attorney General (Court of Appeal Civil Appeal No. 34 of 2000)
  • MTN (U) Ltd v Uganda Telcom Ltd (Supreme Court Civil Appeal No. 13 of 2004)
  • Jennifer Behanga and 2 Others v School Outfitters (Court of Appeal Civil Appeal No. 53 of 1999)

Full judgment

↓ Download PDF

The original judgment as reported. Read the original PDF before relying on any passage.

Airconditioning Centre (U) Ltd v Gilifilian air conditioning (U) Ltd (Civil Suit No. 638 of 2014) [2015] UGCommC 115 (19 August 2015)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.